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Coordinated Funding:
Washtenaw County’s unique
take on the social safety net

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Tim Ryan of Ypsilanti Meals on Wheels makes a delivery to Erma Lathum on Nov. 16.

Tim Ryan of Ypsilanti Meals on Wheels makes a delivery to Erma Lathum on Nov. 16.

Story by Jud Branam | photos by Benjamin Weatherston

Bill Rickenbacher isn’t well-acquainted with the ins and outs of government financing, but he’s happy each day when Ypsilanti Meals on Wheels volunteers bring meals by his Pittsfield Township apartment.

“It’s a huge help,” the 69-year-old retiree said of the daily deliveries — Salisbury steak and greens on one recent lunch. Temporarily slowed by recovery from knee-replacement surgery, Rickenbacher added, “Especially since they began delivering the evening meals as well.”

Unbeknownst to Rickenbacher, the additional daily meals added by Meals on Wheels in the last year were aided by Washtenaw County’s next-gen approach to allocating social safety-net dollars, Coordinated Funding.

The partnership between public funders like Washtenaw County and the city of Ann Arbor and private sources led by the United Way and the Ann Arbor Area Community Foundation is an innovative arrangement that unites the area’s funding sources in pursuit of the most efficient agencies and best program ideas. It’s a system that also serves to maintain and advance social safety net coverage at a time when governmental support for the less fortunate is an endangered concept in many communities.

The approach has won a national award, drawn interest from United Way chapters, local governments and community foundations across the U.S. and Canada, played a hand in sparing county programs from budget cuts and even pulled new money into the system. Along the way, it’s also helped raise a fresh crop of nonprofits in the county.

Brett Lenart

Brett Lenart

Application form

The joint effort began innocently enough a decade or so ago in Ann Arbor, when a community representative from pharmaceutical giant Pfizer — then a major local employer — asked if the many philanthropy requests aimed at the company could share a common application form. “They convened multiple public and private sector players to say ‘Is there a way to unify this process?’” said Brett Lenart, who heads the Washtenaw County Office of Community and Economic Development.

Pam Smith, CEO and president of the United Way of Washtenaw County, says that led to a cathartic moment of funding officials deciding to take their own advice. “We were always asking nonprofits if they were running as efficiently and effectively as possible, and could they do shared services or anything to make sure that they were spending dollars most effectively,” Smith said. “Then we kind of stopped for a minute and looked at ourselves and said, ‘As funders, how could we work better together?’”

After a yearlong series of planning sessions that included and intertwined staff and board members from the various groups, the vision for Coordinated Funding took shape. The program was launched in 2010. Two two-year funding cycles have taken place; the application process for the next round will begin in January.

Neel Hajra, who was involved in the early stages of Coordinated Funding as chief operating officer of the Community Foundation, where he is now chief executive officer, said: “It sounds like a truism, ‘Let’s get the stakeholders together and all talk.’ Who hasn’t said that? And yet getting from talking to action is such a difficult step, especially for funders. The irony is the groups that most ask for collaboration from nonprofits are often the most reluctant to create those kinds of deep, meaningful relationships. One of the hallmarks of Coordinated Funding is that we’ve gone from talk to action in a really deep way.”

Since then, the program has evolved into a layered mesh of shared oversight and review that includes both nascent nonprofits and long-term stalwarts. The program focuses on five goals:

• Early childhood: Increase the developmental readiness of children with high needs so they can succeed when they start school.

• School-aged youth: Increase the high school graduation rate and physical and emotional safety of economically disadvantaged youth.

• Safety net health and nutrition: Increase access to health services and resources and decrease food insecurity for low-income residents.

• Housing and homelessness: Reduce the number of people who are homeless.

• Aging population: Increase or maintain independent living factors for vulnerable, low-income adults age 60 and older.

The Coordinated Funders allocated $4.32 million this year — the same as last year — to 57 programs. In addition to the city’s $1.25 million, that included $1.76 million from the United Way, $1 million from the county, $274,907 from Washtenaw Urban County grant funds, and $26,250 from the Community Foundation.

That doesn’t mean every project is funded. There were $8 million in applications for that $4.32 million.

Better nonprofits

A key aspect to making sure the money is well spent is helping nonprofits conduct business in a professional, accountable way.

It works like this: Along with funding programs, the Coordinated Funders pay a nonprofit to serve as a lead planning and coordinating agency in each category. These leaders then work with recipients within their segment to share best practices, find ways to collaborate and ensure that programs are lined up with pressing needs. A third leg of the program is dedicated to capacity-building among the recipient nonprofits — from bringing accounting standards up to speed to sending leaders to training or industry events.

“The funders have been very good at making sure they provide the support for nonprofits who might not have a full board or might not be able to conduct a professional audit without some assistance,” said Bonnie Billups, executive director of the Peace Neighborhood Center, which has run county- and United Way-supported youth programs for decades.

Pam Smith

Pam Smith

The United Way’s Pam Smith says that was a necessary step given the mercurial nature of nonprofits.

“A lot of times, nonprofits are founded around one person’s love or will for an issue. The agency builds around that person, but doesn’t really follow accepted audit or record-keeping procedures,” Smith said. “And what happens to the agency when the person goes?”

One small agency that is stronger after taking part is Ypsilanti Meals on Wheels. After volunteers noticed that residents were holding back from eating their lunches to save some for dinner, a combination of foundation money, Coordinated Funder money and donations established a dinner drop-off. The agency’s waiting list for meals has been caught up, an associate director has been added and the group is on stronger financial footing. In addition, Director Alison Foreman received training and professional development funds, and came back from a national conference with an idea for a new “Meals on Heels” fundraiser.

“For a smaller organization like that with such a broad mandate, we felt we needed to develop a strong leader who’s going to stay for a while,” Smith said.

In addition, each of the focus categories is assigned a planning and coordinating agency. Ellen Rabinowitz of the Washtenaw Health Plan, which serves as a planning and coordinating agency in the “safety net” category, said, “The process has been helpful in bringing everyone to the table to figure out what are the high-level needs and how do we address them in a coordinated way.”

“We’re identifying the best nonprofits in the business and we’re doing it collectively,” Hajra adds. “Before, if an agency didn’t get funding from one, they would kind of work the system by going to different funders. Now, since we’re collectively investing, it’s so much more comprehensive. We’re much more efficient in making investments in the most effective nonprofits and advancing our goals.”

Separate but shared

Applications for grants are first reviewed by a panel of community volunteers, including some elected officials, who evaluate and score the projects within each category before final funding decisions are made.

While the collaboration was designed to give a shared view of all grants to ensure maximum efficiency in delivering services, money was not pooled. Instead, it remains with each source until distributed to nonprofits.

“We do have a single decision-making process across all of Coordinated Funding, but then each funder releases the payment according to those decisions independently,” Hajra said. “Every decision by Coordinated Funding staff is reviewed at some level by the governing bodies of each funder as well, to make sure there’s still autonomous review — is this true to mission and is this true to taxpayer mandate?”

Likewise, the effort did not create new administrative positions.

“It’s shared across the desks of multiple staff members at every funder,” Hajra said. “Best practice says don’t do that, you should have a dedicated staff person for a collaboration of this size, but philosophically we made that decision early on to not take money out of programs to cover overhead and to keep some autonomy involved in the partnership process.”

The collaboration and focus, proponents say, was especially helpful during the economic downturn a few years back, when both the county and the city took hard looks at their spending with tax revenues down. A 2013 review credited the program with convincing officials to focus their budget-cutting elsewhere.

“Not only were public funding levels maintained, the Coordinated Funders were instrumental in preventing a $260,000 cut to the county’s human services budget, and $160,000 in the city of Ann Arbor’s human service funding,” wrote the TCC Group. “Several interviewees from the public sector indicated that maintaining government funding for human services was much more politically feasible with the knowledge that Coordinated Funding could reduce administrative costs.”

‘Growing pains’

When the program was launched, “There were growing pains and issues of how do you make it all happen,” said Billups.

“In the beginning I was skeptical,” he adds. “I thought it would limit the impact and create a funding stream just for a few individuals. I think the Coordinated Funders have worked hard not to get stuck in those fears, and those fears are not what’s happening today.”

The many conversations and flexibility created by the merged group sometimes went too far, initially, Billups says, resulting in a moving target for applicants between the submission process and the final decisions.

“That was definitely the case at the beginning,” Billups said. “Four years ago we were probably at 4.5 on a scale of 10 — (funders) would ask for the support and input of the nonprofit community but then decide whatever they felt they needed to decide, as opposed to taking the input.“

And some agencies with long track records of success have found themselves on the outside looking in. Amy Goodman heads Washtenaw Literacy, which had received city and county funding for years before Coordinated Funding, then received $60,000 a year in funding in the first round, only to be rejected in 2014. Even though a clear line can be drawn from literacy to improving conditions across all of the key priority areas, it is not spelled out specifically, so Goodman feels her agency essentially slipped through the cracks.

“It was very hard for us,” Goodman said. “(Coordinated Funding) is a good collective impact model, but it’s like collective impact to the ultimate extreme. At the time we were denied funding, I know that the funders were just as baffled because what we do is so cogent to every one of those things. It was the allocation committee that was just checking things off from a checklist on this stuff.”

Despite her agency’s frustration — Washtenaw Literacy is at three and a half staff members, down from six before the cut — Goodman remains an advocate for the Coordinated Funding model overall. Her agency plans to apply again in 2016.

“I think it’s progressive and it’s a tremendous use of resources. I know it’s unique nationally. But in our case it’s been an interesting omission these past couple of years. We serve human services in Washtenaw County; the fact that we’re not funded by human services is kind of strange.”

A frustration cited by agencies that are funded is a demanding schedule of meetings and committee assignments within coordinating groups that come as a condition of receiving money. “If you want to achieve an outcome, we want to do that, but we don’t want to spend 50 percent of our time proving that to you and using a measure that is not cost effective or time effective for us,” said Billups, whose agency receives support for a middle school student enrichment program in the South Maple neighborhood of Ann Arbor.

Billups says those meeting and outcomes requirements have become less onerous as the program has evolved: “They’ve gotten better at listening to the nonprofits and working on outcomes that are real and achievable.” On that scale of 10, he adds, “Now, I think we’re at least a strong 8.5.”

Support structures have been designed to help even the smallest nonprofits get on their feet and adopt best practices, and sessions have been held with applicants who didn’t make it through an initial review, helping them operate to baseline standards.

“We focused on the top five or 10 problems that kept re-emerging on governance and best practices — your mom and your sister can’t be your board treasurer and president, and you need to hold meetings and keep minutes — and worked on those things first,” Smith said.

The group says it seeks candid feedback from participants, even those not pleased with their support. “Even among non-funded agencies, the majority still said Coordinated Funding was a better model than what we had before,” Hajra says. “I’m not saying it made everyone happy, but it was affirmed that this was a value add to helping the most vulnerable.”

Billups believes the effort is trending in the right direction. “It is a good model, and it’s still developing,” he said. “I think we’ve got a few more years of working out some bugs, such as how we make those community outcomes fit the diverse agencies who are asking for funding, yet are real enough that we can actually move the needle in the community.”

Magnet for money

The promise of the Coordinated Funding model has attracted new money into the system as well. The RNR Foundation, a California foundation with local ties, was approached about funding the initial program evaluation in 2013. They agreed, hiring social sector consultants TCC Group to do the work.

“The evaluation went so well and they were so impressed that they came back to the table with a quarter million dollars and said, ‘We would really like to be the sixth partner,’” Hajra said. “Those are dollars that Washtenaw County would have never seen.”

RNR Foundation is now funding a second round of evaluation, at $200,000, focused on the tangible connection between efforts and outcomes.

“We’re trying now to answer the question, do we really make a difference? Is there a measurable difference that Coordinated Funding brings? This kind of evaluation would have never been possible without the model being so attractive,” Hajra said.

“(RNR thinks) there’s a value to replicating parts of Coordinated Funding in other communities,” Smith adds. “That’s what motivates them to fund this evaluation. Assuming the results are good, that’s two third-party evaluations that validate this approach in different ways.”

No other communities have adopted Coordinated Funding, but elements of it have been picked up in a handful of communities, including Ottawa, Canada, and Midland, Mich. The program has been presented at national conferences for foundations and for United Way chapters.

“We’re not actively marketing this thing, people are finding us,” Smith said, adding that community boards and elected officials “are really excited to be part of a leading edge and they know they’re making a difference. It’s fun when you have something that people get excited about and want to talk about.”

During these discussions, Washtenaw County officials have realized that conditions here are different than in most places. For one thing, it’s rare to have general fund money allocated for social services, allowing for some flexibility.

United Way of Washtenaw County's building on Platt Road in Ann Arbor

United Way of Washtenaw County’s building on Platt Road in Ann Arbor

And there’s also the matter of interagency relations.

“That’s another impediment to adopting this model in a lot of places,” Hajra says, “because United Way chapters and community foundations often see themselves as competitors going after the same sources of support. And working with the government gets the same response: ‘Those idiots?’”

In addition, the strong nonprofit community and levels of coordination here make it a tough idea to replicate wholesale. Nonetheless, Smith says, “Even if people don’t adopt Coordinated Funding, we’re glad to have gotten them talking. That’s the starting point.”

“More vulnerable seniors should be able to age in place with dignity as a result of this,” Hajra said. “In terms of homelessness, fewer people should be homeless in Washtenaw County in any given year. Children should be ready to thrive when they get to kindergarten, not just academically, but socially and emotionally. We should see more vulnerable students graduating from high school because of Coordinated Funding. We’re sort of in the baseline data right now. We’ve been measuring this for a year, but the answer to all of this is more.”

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